WebiMax Blog

Yahoo Hopes Making New Pal Pays Off

A lot of major brands are making noise of late. Facebook is expected to release its IPO. Go Daddy changed company heads and its mind. Google penalized itself. Now, Yahoo has made a new pal, Scott Thompson, the president of PayPal, as its chief executive.

Will the move prove savvy for the Internet media company? On the surface, the Yahoo brand does not appear shabby. It hosts 700 million visitors per month; it's a bastion of online sports, daily news, and finance info; and, financial gurus estimate the brand will report over $1 billion in net profit for 2011. That's not too bad. However, when you're up against online titans like the leading search engine, Google, and an intimidating social (and search?) platform in Facebook (outshining Yahoo in ads), you have to expect a lot.

According to comScore stats, Google sites accounted for over 65% of total, core search queries in the US in November of 2011 followed by Yahoo (about 16%). Mr. Thompson was chosen for his "turnaround" reputation; he helped expand PayPal (took over in 2008) to 104 million users (from 50 million) and more than doubled the brand's revenue ($1.8 to over $4 billion).

What are some plans in store for Yahoo? No finite specifics voiced of yet, but analysts say Yahoo has spread itself too thin, investing resources in technology and original content creation, which is a stark contrast to Google, which does not invest in in-brand content creation. However, analysts think Yahoo, and new pal Thompson, can leverage the brand's popular email service and the user data collected, to attract advertisers.

It will be interesting to see how Yahoo proceeds in 2012. Thompson believes Yahoo must cater to advertisers and users. This seem like a good decision considering direct revenue stems from the former while the collective voice of the latter can make or break a brand.

Thompson remains optimistic, relaying Yahoo's waning brand is "fixable," despite his direct inexperience with online media and advertising. Maybe Thompson and Yahoo's opportunities will get a boost from external sources; Yahoo may get more than $10 billion for selling its stakes from Alibaba and Softbank.

Maybe Yahoo can make progress through the decadence of its competition. As referenced, Facebook plans to go public early this year. Will it be a mistake, influencing its 800-million-plus users to seek other platforms? It has been understood Facebook's face man, Mark Zuckerberg, isn't hosting a happy visage about the IPO. Additionally, while Google continues to serve as master in many ways, users have recently seen some quirks (how many Google SERP listings do we get? and Google+ turning SERPs into a McGoogle drivethru?), and of course ironies, related to the Chrome mishap.